City Diary — 30 September
It's park and drive for M&B
Mitchells & Butlers (M&B) has made it clear that it will open many more sites at retail parks to expand its six key drive brands. Diary hears that there are 10 sites now either with contracts exchanged or with heads of terms agreed. Two towns are currently racing to be the first retail park site to open later this autumn. Watch this space.
Can I make a better offer?
A happy band of 15 M&B franchisees have bought their pub freehold, leaving the franchise estate at around 60 sites. Is M&B still open to offers? Chief executive Adam Fowle tells Diary the answer is a theoretical "yes" but he's surprised those in a position to buy hadn't already done so. Brace yourself, Adam. Acorn Finance is sending a fully-funded offer on a franchise site for which M&B rejected an earlier offer. Good news — the offer's been increased. More generally, Acorn boss Paul Thompson reports that two earlier successful franchise bids managed to attract bank funding of 72% and 77% of the total cost.
Estates targeted by 'wall of money'
Insolvency and restructuring specialist Paul Hemming, of Zolfo Cooper, offers some perspective on why private equity firms are still up for buying pub estates. He refers to a "wall of money" sitting in their coffers and that "good assets" will attract "good prices". Most of all, an investment like the one by TDR Capital in buying 333 M&B pubs "gets the money out the door".
Safari game for M&B research
M&B's director of marketing and strategy Adam Martin notes that it's difficult to carry out qualitative research on customers in the pub industry on account of there being so many moving parts — it's not like asking customers about the design of a pot of yoghurt. Fear ye not because the marketing experts at M&B have their own solution — "safari tours". "We put them on a coach, drive them around and listen to them," he says.
Martin makes a meal of pet hates
JD Wetherspoon boss Tim Martin has returned to a couple of time-honoured themes — out-of-touch pubco bosses and the rise of the wretched dinner party. "People running pubcos get removed from the reality of running pubs," he argued at the UK Pub Retail Summit before adding: "I personally hate dinner parties — and the epitome of dinner party-goers are Government ministers."
Nick in bad Spirits after £10m blow
Another investor who bought pubs during the heady days has reported a hangover. Nick Leslau's Prestbury bought 220 Spirit pubs for around £500m on a 25-year sale-and-leaseback deal in March 2004. Many of these pubs now sit with Punch. Accounts for the year ending 31 December 2009 report that Prestbury took a £10.4m hit on the value of the portfolio after a breach of loan-to-value covenant in March 2009.
Church feted in agitator's pub
Sometimes you wonder how Fair Pint agitator Karl Harrison finds time to run his pubs business, what with the time he spends in Canada and his regular jottings on the Morning Advertiser web forums. Well, it looks like things are ticking along. Recently, for example, his Enterprise pub, the Bedford in Balham, south London, hosted a secret gig by Charlotte Church, who was performing new material for the first time. Twitter fans were delighted with the show, with one exclaiming: "Went to Charlotte Church's secret gig in Balham last night! She was incredible!"
The importance of being Greg
What's happening? Liberal Democrat Greg Mulholland wrote to the Morning Advertiser earlier this year to complain about an oversight in which we missed him off our Most Influential list. Now The Daily Telegraph has left him off its list of the 50 most influential Liberal Democrats. Diary, naturally enough, hates conspiracy theories, but this has the whiff of a giant conspiracy. Greg is very important. If anyone needs this confirming, you only have to ask him.
Pubco on the turn with tenancies?
All the controversy over tenanted pubs seems to have worried one or two of the more conservative operators. There's even talk of one well-known tenanted pub company cracking on with turning its tenancies (all its tenancies) into managed pubs.
O'Neill's moves into Edinburgh
A plan by M&B to expand its food-led brands has had plenty of publicity. But its Irish brand, O'Neill's, has an expand-where-possible agenda. Proof of this comes from Edinburgh where it won planning consent to turn its student haunt the Tron into an O'Neill's. The Irish brand is new to Edinburgh. It has been a fixture in Glasgow for years, with pubs in Queen Street, Sauchiehall Street and Merchant Square.
Town & City scraps bad form
Town & City Pub Company had the best like-for-like sales growth on the high street last year. Chief executive Toby Smith has been shining some light on the things that have changed to achieve this — not least recruiting the right staff.
"Our job application form was the same as the form to join the library. We had to start recruiting on personality and match what our staff like doing in their spare time with the right trading environment.
"If you like playing chess, you're probably not right for Saturday night," says Smith. "People are now staying with us longer."
